NSE Pays Up, Gears Up: ₹1,388-Crore Settlement Could Launch IPO into Stratosphere

India's biggest equity bourse, the National Stock Exchange (NSE), made a significant move to end years of regulatory uncertainty by agreeing to pay a record ₹1,388 crore settlement to the Securities and Exchange Board of India (SEBI). The path-breaking move will end the years-long dark fibre and co-location cases and may widen the door for the exchange's long-pending initial public offering (IPO) this fiscal year.

 

Key Highlights

Record Settlement Offer: NSE has offered SEBI ₹1,388 crore—the largest ever settlement with India's markets regulator—of which ₹1,165 crore is for the co-location case and ₹223 crore for the dark fibre case.

 

Regulatory Hurdles Overcome: The deal aims to resolve claims since 2015 that resulted in unfair, faster access to NSE's trading servers for some brokers, which undermined market fairness and integrity.

 

Legal Closure in View: If SEBI gives its approval for the offer, the pending proceedings in the Supreme Court will be withdrawn, removing a massive legal overhang that has stalled NSE's IPO plans since 2016.

 

SEBI Review and Way Forward: SEBI will give a no-objection certificate (NOC) for the IPO within two to three months after a thorough review of NSE's systems, governance, and technology infrastructure.

 

IPO Timeline: With approvals in place, NSE can file its draft red herring prospectus (DRHP) by the end of the year, and the IPO can hit the markets before May 2026.

 

Investor Exit Opportunity: The IPO would also provide marquee investors such as LIC, SBI, Morgan Stanley, and the Canada Pension Plan Investment Board with a long-awaited exit opportunity.

 

Reforms in Governance and Leadership: Almost all the organizations that were engaged in the abuses have stepped down from NSE. SEBI also monitors the exchange's management appointments, compensation packages, and technology investments to ensure good governance prior to listing.

 

"The size of the settlement is as per Sebi norms, and the approval would come in due course, and the IPO process will get a boost. The exchange hopes to finalize the IPO in the current fiscal year," the person said.

 

What's Next?

Even though the settlement removes the biggest regulatory hurdle, SEBI and Supreme Court approvals are still awaited. SEBI is also auditing NSE's operational and technology infrastructure for full compliance. If all goes well, NSE's IPO—one of the most hotly anticipated in the history of Indian capital markets—could finally be a reality, boosting investor confidence and driving the nation's equity markets. 

 

Source: Moneycontrol, Business Standard, UnlistedZone, Angel One, Economic Times, Investing.com, The Hindu BusinessLine